System and method for managing customized reward offers

ABSTRACT

In accordance with some embodiments of the present invention, a method is provided for managing reward offers. A first performance target that is associated with a financial account is determined. Transaction data that is associated with the financial account is received, and a second performance target for the financial account is determined based on the transaction data.

The present application is a continuation of U.S. patent applicationSer. No. 12/237,716 filed Sep. 25, 2008, entitled “SYSTEM AND METHOD FORMANAGING CUSTOMIZED REWARD OFFERS”, which is a continuation of U.S.patent application Ser. No. 10/218,157, filed Aug. 12, 2002 and issuedas U.S. Pat. No. 7,430,521 on Sep. 30, 2008, which-is acontinuation-in-part of U.S. patent application Ser. No. 09/422,415,filed Oct. 21, 1999, entitled “METHOD AND SYSTEM FOR PROCESSINGCUSTOMIZED REWARD OFFERS” and issued as U.S. Pat. No. 6,434,534 on Aug.13, 2002; which is a continuation of U.S. patent application Ser. No.08/921,868, filed Aug. 28, 1997 and issued as U.S. Pat. No. 6,018,718 onJan. 25, 2000. Each of the above-referenced applications is incorporatedby reference herein in its entirety.

FIELD OF INVENTION

The present invention relates generally to methods and systems forpromoting the use of financial accounts. More particularly, the presentinvention relates to a method and system which facilitates generating,communicating and managing a customized reward offer presented to anaccount holder.

BACKGROUND OF THE INVENTION

Methods and systems for promoting usage of credit card accounts are wellknown. Such methods and systems are generally designed to reward acredit card holder for exhibiting behavior preferred by a credit cardissuer. Credit card reward programs typically fall into one of threecategories: reward accrual programs, tiered reward programs andspecialty programs.

Reward accrual programs promote usage of a credit card account byrewarding a card holder for account usage with either rebates orredeemable program points. In such programs, account usage is typicallymeasured as a function of either total charge volume or total revolvingcredit. Generally, card holder performance is measured monthly, andrewards are distributed based on the monthly measurements.

Tiered reward programs promote usage of a credit card account byrewarding a card holder for account usage at certain predefined levels.Like other reward programs, account usage is usually measured as afunction of either total charge volume or total revolving credit, buttiered reward programs distribute rewards only to those card holdersperforming above certain performance levels. In many tiered rewardprograms, several performance levels are established by the issuer witheach performance level having an associated reward.

Recently, some credit card issuers have implemented specialty programswhich are tailored to a particular group of card holders. GE Capital,for example, has introduced the “GE Capital Gains Card” which is atravel and entertainment card that rewards card holders for savingrather than spending money. GE offers a card holder bonus pointsredeemable for airline tickets or gifts if the card holder conforms tobehaviors identified by the card holder's company. For example, if acard holder conforms to a corporate travel policy by flying with apreferred carrier or staying at a preferred hotel, the card holder willbe awarded points.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a schematic block diagram illustrating the information flowbetween parties according to one or more embodiments of the presentinvention.

FIG. 2 is a schematic block diagram illustrating the components of acredit card issuer central controller according to one or moreembodiments of the present invention.

FIG. 3 is a table illustrating the structure of an exemplary card holderaccount table stored at the credit card issuer central controller.

FIG. 4 is a table illustrating the structure of an exemplary performancetarget table stored at the credit card issuer central controller.

FIG. 5 is a table illustrating the structure of an exemplarytarget/reward table stored at the credit card issuer central controller.

FIG. 6 is a flow chart illustrating the computer implemented steps usedto set customized rewards according to one or more embodiments of thepresent invention.

FIG. 7 is a flow chart illustrating the computer implemented steps usedto determine earned rewards according to one or more embodiments of thepresent invention.

FIG. 8 is a flow chart illustrating the computer implemented steps usedto periodically adjust performance targets according to one or moreembodiments of the present invention.

DETAILED DESCRIPTION

In one or more embodiments of the present invention, a method isprovided for managing reward offers. A first performance target that isassociated with a financial account is determined. Transaction data thatis associated with the financial account is received, and a secondperformance target for the financial account is determined based on thetransaction data.

In other embodiments, a first performance target that is associated witha financial account is determined. Transaction data that is associatedwith the financial account is received, and it is determined whether acard holder associated with the financial account is eligible for areward based on the first performance target and the transaction data.Also, a second performance target for the financial account isdetermined based on the transaction data. In some embodiments, accountdata that is associated with the financial account is also determined.

Some embodiments of the present invention provide the benefit of givinga card holder a definite periodic performance target. Also, in variousembodiments, different types of rewards and/or different levels ofrewards may be provided to different card holders, as some card holdersmay be more interested in a particular type or level of reward thanother card holders. For example, a card holder who is not interested inoffered rewards may not be motivated to perform at a higher level. Oneor more embodiments of the present invention provide for customizingprograms to the preferences of the individual card holders. Thus,rewards need not be predefined for an entire population of participatingcard holders.

Various embodiments of the present invention may provide the benefitthat the type of activity or behavior to be encouraged may be based onthe individual profile of the card holder. Without analyzing the profileof a card holder, in some cases an issuer's reward program could beincreasing the risk of default on a marginal quality account byencouraging increased card usage. For example, by encouraging revolvingcharges, some card holders with below average credit credentials may beencouraged to over-extend themselves. In such a circumstance, a cardholder actually may be encouraged to behave in a manner that isdetrimental to the credit card issuer. Thus, according to someembodiments, individualized performance targets may be set for each cardholder, based on the card holder's transaction history and/orpreferences.

1. System

Methods and systems according to various embodiments of the presentinvention will now be discussed with reference to FIGS. 1-8. FIG. 1illustrates, in schematic block diagram format, the information flowbetween relevant parties according to one embodiment of the presentinvention. As shown, a credit card issuer central controller (“CCI”) 200transmits information to a credit card holder 112. Although suchinformation may be transmitted electronically, it is preferablytransmitted via a periodic account statement (not shown).

According to one embodiment, CCI 200 accesses stored historical accountdata associated with the account of credit card holder 112 anddetermines a first performance target for credit card holder 112. CCI200 then selects a reward to offer credit card holder 112 if he behavesin accordance with the first performance target. As shown in FIG. 1,this first customized reward offer, including the first performancetarget, an indication of the reward being offered (e.g., a descriptionof the reward, an indication of the reward terms) and a first targetperiod, is transmitted to credit card holder 112 as indicated byreference numeral 120.

After receiving the transmission of the customized reward offer from CCI200, credit card holder 112 may initiate and complete transactionsaffecting the credit card account in an effort to achieve thecommunicated first performance target. Transactions may be conducted,for example, with various merchants using point-of-sale (“POS”)terminals 114, 116 and 118. As indicated by reference numeral 126, CCI200 collects transaction data from POS terminals 114, 116 and 118through a conventional credit card system network (“POS network”) 110.This transaction data is stored by CCI 200 and is used to manage theaccount of credit card holder 112.

In some embodiments, CCI 200 evaluates the collected transaction data todetermine a second performance target for credit card holder 112 priorto the end of the first target period. In alternate embodiments, thedetermination of the second performance target could be completed at orsubsequent to the end of the first target period. The determination ofthe second performance target preferably is based on the firstperformance target and the transaction information collected since thetransmission of the first customized reward offer. Alternatively, thedetermination of the second performance target may be based on thehistorical transaction data associated with the account of credit cardholder 112, on other credit card holder profile data, on the firstperformance target, on the transaction information collected, or on anycombination thereof. After determining the second performance target,CCI 200 transmits to credit card holder 112 a second customized rewardoffer identified by reference numeral 122. This second transmissionincludes the second performance target, an indication of the rewardbeing offered (e.g., a description of the reward, an indication of thereward terms) and a second target period.

Upon expiration of the first reward offer, CCI 200 compares the firstperformance target to the transaction data collected since thetransmission of the first reward offer. If credit card holder 112 hasachieved the first performance target, CCI 200 updates the credit cardholder account to reflect the reward. In some embodiments, CCI 200transmits to credit card holder 112 an announcement of the reward earnedby credit card holder 112 for achieving the first performance target.

FIG. 1 depicts only an embodiment of the invention. Other arrangementsof devices to perform various methods specified herein will be readilyappreciated by those of skill in the art.

Referring now to FIG. 2, CCI 200 is illustrated in greater detail, inaccordance with various embodiments. As shown, CCI 200 includes acentral processing unit (“CPU”) 210, a clock 212, a random access memory(“RAM”) 214, a read only memory (“ROM”) 216, a communication port 218,and a storage device 220. Communication port 218 provides a connectionbetween CCI 200 and POS network 110 allowing one-way or two-waycommunication between CCI 200 and POS network 110.

Those skilled in the art will understand that devices in communicationwith each other need not be continually transmitting to each other. Onthe contrary, such devices need only transmit to each other asnecessary, and may actually refrain from exchanging data most of thetime. For example, a device in communication with another device via theInternet may not transmit data to the other device for weeks at a time.

As shown in FIG. 2, storage device 220 stores a database of account,target and reward data, including a card holder account table 300; atarget/reward table 400; and a transaction table 500. Tables 300, 400and 500 comprise at least a portion of the database stored by storagedevice 220 and are described more fully with reference to FIGS. 3, 4 and5 respectively. Storage device 220 is preferably a magnetic disk drive,but could be a CD-ROM drive, optical disk drive, RAM drive or any otherconventional storage device.

The databases are described in detail below and depicted with exemplaryentries in the accompanying figures. As will be understood by thoseskilled in the art, the schematic illustrations and accompanyingdescriptions of the databases presented herein are exemplaryarrangements for stored representations of information. A number ofother arrangements may be employed besides those suggested by the tablesshown. For example, those skilled in the art will understand that thenumber and/or content of the databases can be different from thoseillustrated herein. Similarly, the illustrated entries of the databasesrepresent exemplary information only; those skilled in the art willunderstand that the number and/or content of the entries can bedifferent from those illustrated herein. Based on the present disclosuremany other arrangements of data will be readily understood by those ofskill in the art.

2. Databases

FIG. 3 illustrates an example of the contents of card holder accounttable 300 in a representative tabular format. Those skilled in the artwill understand that the card holder account table 300 may include anynumber of entries or records. Each record of representative accounttable 300 represents information pertaining to a card holder account.This information may be considered an account header in the art andincludes the following six information elements: account ID field 310;card holder name element 312; address element 314; telephone numberfield 316; credit line field 318; and available credit field 320.

Account ID field 310 stores a unique account identifier. Account IDfield 310 is assigned by the credit card issuer to uniquely identify anaccount of a card holder. In some embodiments, the unique accountidentifier will be a standard 16 digit credit card account number.

Card holder name element 312 stores the name of a card holder 112 who isresponsible for the account described by the account table record. Cardholder name element may be a single field, but will more likely be acombination of fields.

Address element 314 stores the mailing address of the card holder.Although some embodiments may include only one address element, or onlyone type of address, it may be useful to provide multiple addresselements and/or other types of addresses to accommodate a home address,a billing address, an email address, and/or a business address. Addresselement 314 may be a single field, but will more likely be a combinationof fields.

Telephone number field 316 stores the home telephone number of the cardholder 112 responsible for the account. Additional telephone numbers,such as office and facsimile numbers, may also be stored in accounttable 300.

Total credit line field 318 stores the maximum amount of credit that thecredit card issuer has provided to the card holder responsible for theaccount. Available credit line field 320 stores the amount of unusedcredit available to the credit card holder responsible for the account.Although available credit line field 320 is stored in account table 300in one or more embodiments, this information could easily be calculatedas necessary by subtracting the outstanding balance from the contents oftotal credit line field 318.

Some embodiments of the invention further include average quarterlycharge volume field 322, average quarterly outstanding balance field 324and average transactions per month field 326, all containing data whichdescribe various characteristics of an account. These fields arepopulated by CCI 200 based on data maintained in transaction table 500,and may be used as predictors of future account activity. The contentsof these fields are self-explanatory and may be derived in a variety ofwell known ways.

Other characteristics of an account (e.g., average balance transfer,average principal payment amount, average finance charge amount, aperiod of time the account has been active) will be known to those ofskill in the art.

Although six fields are depicted in FIG. 3, not all of the fieldsdepicted in FIG. 3 are required, and various substitutions, deletionsand other changes to the tabular representation will be readily apparentto those of ordinary skill in the art. For example, the averagetransactions per month is not needed in many embodiments. The depictedfields, for example, the averages, are for illustration only. Variousother types of account data are described herein and still others willbe readily apparent to those of skill in the art.

FIG. 4 illustrates an example of the contents of target/reward table400. Each record of representative target/reward table 400 representsinformation pertaining to a performance target and corresponding rewardoffered to a particular card holder account. Those skilled in the artwill understand that the target/reward table 400 may include any numberof entries or records. This table allows a credit card issuer to set,track, evaluate and reward the desired performance of a card holder andincludes the following seven information elements: account ID field 410;period element 412; target type field 414; target parameter field 416;reward type field 418; reward terms element 420; and status field 422.The fields of target/reward table 400 are populated with valuesdetermined by the credit card issuer. The steps for determining thesevalues are described in more detail with reference to FIG. 6.

Account ID field 410 stores a unique account identifier that uniquelyidentifies an account of a card holder. Target period element 412identifies the period of time which a credit card holder is provided toachieve a defined target. In the example shown in FIG. 4, target periodelement 412 is based on calendar quarters. In alternative embodiments,however, the target periods could be months, years or based on specificstart and end dates.

Target type field 414 stores a code representing a type of targetassigned to an account identified by account ID field 410. Althoughfield 414 typically only contains a code, the contents of field 414illustrated in FIG. 4 show the logical representations of the targettype. The type of performance target applicable to a card holder accountis generally selected from a set of target types defined by the creditcard issuer. In the example shown in FIG. 4, target type field 414 maystore a code representing a target quarterly charge volume, a targetquarterly outstanding balance, and a target number of transactions permonth.

Of course, credit card issuers may define numerous alternative targettypes including, but not limited to, target monthly principal payments,target number and/or volume of purchases at specific merchants (or typesof merchants), target balance transfer amounts from the card holder'saccount (e.g., a maximum amount transferred from the card holder'saccount), target balance transfer amounts from other accounts (e.g., aminimum amount transferred to the card holder's account from otheraccounts), and target period of time the account remains open or active.

For example, in accordance with one or more embodiments of the presentinvention, a performance target may define an amount of funds to betransferred to the card holder's account from another account (e.g.,from an account maintained by a second card issuer). The amount oftransferred funds may qualify the account holder to receive a rewardsuch as a reduction in APR charged against the card holder's account towhich the funds were transferred. For example, a reward offer may informthe card holder that he can receive a 0.5% reduction in APR chargedagainst his account (including all of or a portion of any outstandingbalances) in exchange for each $1,000 transferred from other accounts(e.g., from other accounts maintained by the same credit card issuer, orfrom accounts maintained by other issuers).

Target parameter field 416 stores the performance level at which a cardholder must perform during the period identified by target periodelement 412 to achieve a reward. The data stored in target parameterfield 416 is used to determine whether a card holder has achieved thetarget set by the credit card issuer.

Reward type field 418 stores a code representing a type of rewardoffered to a card holder responsible for the account identified byaccount ID field 410 for the target period 412. Like target type field414, reward type field 418 typically only contains a code. The logicalrepresentations of the code of field 418 are illustrated in FIG. 4. Asshown, the example reward types illustrated in FIG. 4 include a cashrebate reward, a frequent flyer mile reward and an APR reduction reward.Numerous alternative reward types are possible, including withoutlimitation magazine subscriptions, free gifts and discount coupons.

Reward terms field 420 stores a code representing the terms of thereward associated with the record. CCI 200 uses the data of reward termsfield 420 to provide rewards to a credit card account in the event theperformance target has been achieved. The meaning of reward terms field420 is interpreted based, in part, on the value of reward type field418.

In at least one embodiment of the invention, reward status field 422 isincluded to store a code indicating whether the performance target forthe account has been satisfied.

Although seven fields are depicted in FIG. 4, not all of the fieldsdepicted in FIG. 4 are required, and various substitutions, deletionsand other changes to the tabular representation will be readily apparentto those of ordinary skill in the art. For example, the reward statusfield is not needed in many embodiments. The depicted fields, forexample, the target types, are for illustration only. Various othertypes of targets are described herein and still others will be readilyapparent to those of skill in the art.

Referring now to FIG. 5, there is illustrated an example the contents ofa representative transaction table 500. Each record of representativetransaction table 500 represents a transaction between a credit cardholder and a merchant. Those skilled in the art will understand that thetransaction table 500 may include any number of entries or records.Transaction table 500 includes the following seven fields: transactionID field 508; account ID field 510; merchant ID field 512; transactionamount field 514; date field 516; time field 518; transactionauthorization number field 520; and credit card authorization number522. Transaction table 500 may be used to analyze the account activityof each account stored in card holder account table 300. Analysis ofaccount activity may be performed in any number ways well known by oneof ordinary skill in the credit card processing field.

Although seven fields are depicted in FIG. 5, not all of the fieldsdepicted in FIG. 5 are required, and various substitutions, deletionsand other changes to the tabular representation will be readily apparentto those of ordinary skill in the art. For example, the time field isnot needed in many embodiments. The depicted fields, for example, themerchant identifiers, are for illustration only. Various other types ofidentifiers will be readily apparent to those of skill in the art.

3. Processes

Having thus described the system architecture and components of variousembodiments, the operation of the system according to variousembodiments will now be described in greater detail with reference toFIGS. 6-8, and continuing reference to FIGS. 1-5. It is to be understoodthat the software instructions (not shown) necessary to provide thefunctionality described herein are preferably stored in ROM 216 orstorage device 220 of CCI 200.

Referring now to FIG. 6, a process according to one or more embodimentsof the present invention will be described. As shown at step 610, CCI200 accesses data stored in card holder account table 300 for settingperformance targets. The criteria referred to at step 610 includesfields 322, 324 and 326. As previously indicated, these fields arepopulated by CCI 200 based on an analysis of records in transactiontable 500. Although specific criteria are identified in FIG. 6, thecriteria may be any information that an issuer believes to be indicativeof particular card holder behavior. The criteria forms the basis fordetermining performance targets, reward terms or both.

One method presently employed by credit card issuers to predict andinfluence card holder behavior is determining a score defined by ascoring system. Scoring systems are mathematical models designed toprovide probabilities of future performance based on a creditor's actualhistoric performance. Models are developed from past behavior and datarelationships and are used to identify predictive variables. Scoringsystems can be used as absolute decision tools or in combination withjudgmental and expert system rules.

Credit card issuers are currently using scores to determine: who willrespond to an offer; who will reliably repay credit; and who willgenerate revenue for a lender. These scores are known as responsescores, risk scores and revenue scores, respectively. Response Scoresare used to determine how to modify solicitations for maximum resultsand for areas of the country that have the greatest growth potential forspecifically designed card products like insurance or investmentcross-sells. Risk Scores are used to predict delinquencies andbankruptcies. They are also used to predict the extent and timing ofmonthly payments. Revenue scores assign a ranking to individuals by therelative amount of revenue they are likely to produce over a period oftime following score assignment. Revenue scores help issuers in accountmanagement by identifying inactive accounts that ought to be targetedwith an appropriate offer and by identifying the most desirableprospects for acquisition.

A score may also be classified as either a credit score or a behaviorscore. A credit score is a statistical measure used by creditors todetermine whether to extend credit in the form of a loan or as a creditline on a credit card. Credit scores takes into account many factors,including: annual income, years at current job, residence, debt paymenthistory, current debt obligations and long term debt obligations.Creditors may assign different weights to these criteria to compute acredit score.

A behavior score is another statistical measure used by issuers tobetter manage individual accounts to maximize profit per account. Thebehavior score can include more than 50 different characteristics,including: extent of monthly payments, promptness of payment, use ofcard for purchases or cash advances, size and type of purchases andtypes of spending categories among others.

One way to select relevant criteria for setting performance targets isillustrated at step 610, wherein CCI 200 accesses account data derivedfrom historic transaction data such as average quarterly charge volume322, average quarterly outstanding balance 324 and average number ofmonthly transactions 326. CCI 200 then accesses rules for settingperformance targets at step 612. These rules may be stored in a databaseor otherwise implemented through software. These rules are appliedagainst the criteria determined at step 610. Illustrative examples ofrules for setting performance targets are described with reference toTable I, below.

TABLE I Rules for setting performance targets Rule Target Type TargetParameter If quarterly charge Quarterly charge Target charge volume (x)is less than a volume volume = mx predetermined minimum volume Ifquarterly Quarterly Target quarterly outstanding balance (y) isoutstanding balance outstanding balance = ny less than a predeterminedpercentage of total credit line If transactions per Transactions perTarget transactions month (z) is less than a month per month = pzpredetermined minimum number

To apply the first rule of Table I, CCI 200 must determine a quarterlycharge volume for a subject account as one of the criteria determined atstep 610. At step 612, the determined quarterly charge volume iscompared to a predetermined minimum volume. If the determined volume isless than the minimum, a target quarterly charge volume will be set forthe account. The target quarterly charge volume will be equal to thedetermined quarterly charge volume of the account times a multiplier m.Application of the remaining two rules is accomplished in a similarfashion, where m, n and p are numbers greater than zero.

The quarterly charge volume, quarterly outstanding balance and number oftransactions per month are readily calculated by one having ordinaryskill in the art. Of course, the rules of Table I are merely simpleillustrative examples of the numerous rules which could be implementedby a credit card issuer, depending on its particular needs. It will alsobe understood that multipliers m, n and p may vary for each account.

It should be recognized that multiple targets and rewards could bedetermined for some or all card holder accounts. It should also berecognized that credit card issuers are not limited to the criteriadefined herein. The criteria on which targets are determined may bebased on a credit card issuer's interpretation of behavior and revenuescores for the account, on a combination of scores and specific behaviorindicators, such as those shown in card holder account table 300, or onany other predictive variable.

At step 614, CCI 200 accesses rules for setting reward terms. Like therules for setting performance targets, these rules may be stored in adatabase or otherwise implemented through software and are appliedagainst the criteria determined at step 610. Illustrative examples ofrules for setting reward terms are described with reference to Table II,below.

TABLE II Rules for setting reward terms Rule Reward Type Reward Offer Ifcurrent cash Cash rebate Reward offer = qj rebate is j percent Iffrequent flyer Frequent flyer miles Reward offer = 1.5 mile level equals1 mile miles per dollar charged per dollar charged If current APRReduced APR Reward offer = 18% equals 19% APR

To apply the first rule of Table II, CCI 200 must determine the currentcash rebate percentage corresponding to a subject account as one of thecriteria determined during step 610. The determined cash rebatepercentage may be a global parameter that applies to all accounts; itmay be a parameter that is customized for each account; or it may beotherwise calculated. At step 612, the determined cash rebate percentageis multiplied by a variable q to set the reward terms where j and q arenumbers greater than zero. Application of the remaining two rules isaccomplished in a similar fashion.

While the rules of Table II are provided as simple illustrative examplesof rules for setting reward terms, numerous other rules could beimplemented by a credit card issuer, depending on its particular needs.For example, the credit card issuer could use card holder input toselect and set reward terms. One way of collecting card holder input isby providing a card holder a menu of reward options from which to selectpreferences. In addition, it should be recognized that a mechanism forselecting between rules could be easily implemented by a credit cardissuer, and could be based on issuer preferences, mutual exclusivity ofrules or any other selection mechanism.

At step 616, CCI 200 updates target/reward table 400 to reflect thetarget and reward terms. Specifically, CCI 200 adds a new record totarget/reward table 400 and populates field 410 with the subject accountID; element 412 with data indicating the period of the target and rewardoffer; fields 414 and 416 with the target type and target parameterdetermined at step 612; and fields 418 and 420 with the reward type andreward terms determined at step 614.

As shown, at step 618, CCI 200 outputs a periodic account statement toinform card holder 112 of the reward offer. The periodic accountstatement includes the performance target, the target period and thereward terms to induce card holder 112 to behave in a manner prescribedby the credit card issuer and achieve the communicated performancetarget during the target period. Although the periodic statement of someembodiments is a written communication between the issuer and the cardholder, the communication could take any number of forms includingupdating a database accessible by the card holder (e.g., accessible viaa website) or transmitting an electronic or facsimile representation(e.g., via an email) of a periodic statement.

In some embodiments, CCI 200 informs card holder 112 of the reward offerwithout outputting a periodic (or non-periodic) account statement. Forexample, the reward offer may be communicated to the card holder invarious ways, including without limitation, updating a databaseaccessible by the card holder (e.g., accessible via a website), ortransmitting an electronic or facsimile representation (e.g., via anemail) of the reward offer, without also providing an account statement.

As previously described with reference to FIG. 1, throughout the targetperiod CCI 200 stores transaction data relating to the account of cardholder 112. The transaction data is received from various merchants. Atstep 620, CCI 200 stores the received data in transaction table 500, andupdates status field 422 based on a comparison of the aggregatetransaction data to the performance target data stored in performancetarget table 400. Prior to the end of the target period, CCI 200determines a second set of target and reward data based on the receivedtransaction data in transaction table 500, the current periodperformance target and reward offer data in target/reward table 400. Anexample of the specific steps executed at step 622 are more fullydescribed with reference to FIG. 8.

Finally, at the end of the current target period, CCI 200 determineswhether a card holder has achieved the performance targets determined atstep 612. A example of the specific steps executed at step 624 are morefully described with reference to FIG. 7. If the card holder has failedto achieve the performance targets determined at step 612, no rewardsare awarded, as shown by step 628. If, however, the performance targetsdetermined at step 612 have been achieved, CCI 200 updates theappropriate account data to reward card holder 112 for exhibiting thedesired behavior, as shown by step 626.

In one or more embodiments, the credit card issuer also informs a cardholder if the performance target has been achieved and/or if a rewardhas been applied. For example, the card holder may be informed via anaccount statement, by updating a database accessible by the card holder(e.g., accessible via a website), or by transmitting an electronicsignal (e.g., via an email) indicating that the reward has been earnedand/or a target has been achieved.

Referring now to FIG. 7, there is illustrated a specific example of theprocessing steps executed during steps 624 and 626 of FIG. 6. Thespecific example relates to the card holder account associated withrecord 350 of card holder account table 300 and record 450 oftarget/reward table 400. As shown by record 450, the card holderresponsible for account having account ID 2222-3333-4444-5555 wasoffered a cash rebate reward of two percent of charges transacted duringthe first quarter of 1997 which exceed $1,500.00. At step 624, CCI 200determines whether the quarterly charge volume for account2222-3333-4444-5555 is equal to or greater than $1,500.00. This ispreferably accomplished by examining status field 422 of record 450. Asshown, the performance target defined by record 450 has been met.

If the card holder performance had failed to meet the performancetarget, the card holder would not be eligible for a reward, as shown atstep 712. Since the card holder performance exceeds the performancetarget, CCI 200 executes the steps generally referred to by referencenumeral 626 in FIG. 6. At step 714, CCI 200 accesses and retrieves thereward offer criteria from fields 418 and 420 of record 450. Based onfields 414 and 416 of record 450, CCI 200 determines the actualquarterly charge volume of the account at step 716. This may beperformed in any number of well-known ways including, withoutlimitation, accessing a defined field in an account header orcalculating the amount using account record 350 and related records oftransaction table 500.

At step 718, CCI determines the amount of quarterly charge volumeexceeding the performance target by subtracting the actual quarterlycharge volume determined at step 716 from $1,500.00, target parameter416 of record 450. Finally, at step 720, CCI 200 applies the rewardterms of two percent to the difference determined at step 718, and CCI200 updates transaction table 400 to distribute the cash rebate.

Referring now to FIG. 8, there is a flow chart illustrating specificsteps which may be executed to determine a second set of target andreward data. The steps depicted in FIG. 8 are merely illustrative of onespecific implementation and are not intended to limit the scope of thepresent invention. Other embodiments which are within the scope of thepresent invention will be readily apparent to one of ordinary skill.

At step 810, CCI 200 retrieves first target type 414 and first targetparameter 416 from target/reward table 400. Based on first target type414, as shown at step 812, CCI 200 determines a card holder performancevalue representing the card holder's performance during the targetperiod. The card holder performance value may be calculated based onhistorical transaction data in transaction table 500 or may be retrievedfrom card holder account table 300, such as from fields 322, 324 and326. At step 814, CCI 200 compares the card holder performance value tofirst target parameter 416.

If the card holder performance value is less than or equal to the firsttarget parameter 416, the card holder has not yet achieved the firstperformance target. In that case, CCI 200 processes step 816 anddetermines whether the card holder performance value is within 90% ofthe first target parameter 416. If the card holder performance value isless than or equal to 90% of the first target parameter 416, CCI 200determines the second target parameter by multiplying the first targetparameter by 0.9, and sets the second reward terms equal to the firstreward terms, as shown at steps 818 and 820. This is intended to reducethe target to enable the cardholder to achieve it.

If the card holder performance value is greater than 90% of the firstperformance target, CCI 200 sets the second target parameter equal to110% of the first target parameter and sets the second reward termsequal to 110% of the first reward terms, as shown at steps 822 and 824.This is intended to encourage the card holder to marginally exceed theoriginal target and earn proportionally greater rewards.

Referring back to step 814, if the card holder performance value isgreater than the first performance target, the card holder has achievedthe first performance target. At step 826, CCI 200 determines whetherthe card holder performance value is more than 125% of the firstperformance target. If the card holder performance value is less than orequal to 125% of the first performance target, the card holder has onlymarginally exceeded the first performance target. In which case, CCI 200sets the second target parameter at 1.25 times the first targetparameter and sets the second reward terms at 1.1 times the first rewardterms, as shown by steps 828 and 830. The second target and rewardvalues are set to incent the card holder to exceed his presentperformance in the second period.

If the card holder performance value exceeds 125% of the firstperformance target, the card holder performance is consideredexceptional. Accordingly, the second target parameter is set equal to125% of the card holder performance value and the second reward termsare set equal to 125% of the first reward terms. By determining thesecond performance target based on the card holder's actual performancevalue, the exceptionally performing card holder is incented to step uphis performance even more during the second period. As shown at step836, a record is added to target/reward table 500 containing the secondperformance target and the second reward terms.

One or more embodiments of the present invention provide a method andsystem to define, manage and evaluate reward offers which are customizedbased on account criteria. Accordingly, account holders may be inducedto exhibit behavior desired by an account issuer.

A method according to some embodiments of the present invention isprovided for providing and managing a customized reward offer to aholder of a financial account. The method includes the step of accessinghistorical account data associated with the financial account. Themethod further includes the step of determining a first performancetarget associated with the financial account. The method also includesthe steps of selecting a reward offer having an associated rewarddescription and transmitting the first performance target and the rewarddescription to the account holder. The method further includescollecting transaction data associated with the financial account andevaluating the collected transaction data to determine a secondperformance target associated with the financial account.

In some embodiments, the collected transaction data further is comparedto the first performance target. If the collected transaction dataexceeds the first performance target, the financial account is updatedto reflect the reward.

A system according to one or more embodiments of the present inventionis also provided for implementing one or more of the process embodimentsdescribed herein.

Some embodiments of the present invention provide the benefit ofpromoting the use of a financial account by enabling a credit cardissuer to tailor targets and rewards based on characteristics of anindividual financial account, or of one or more financial accounts.Other features and advantages of the various embodiments describedherein will be readily apparent from the detailed description and fromthe accompanying drawings.

4. Additional Embodiments

In addition to various reward types described herein, other reward typesmay include discounts on products and/or services offered by the creditcard issuer. For example, many credit card issuers offer servicesincluding, without limitation, insurance programs (e.g., creditinsurance, travel insurance), and travel agency programs, and typicallycharge account holders a fee or premium (e.g., an annual fee, or aper-use cost) for providing the service. Other programs, products and/orservices offered by credit card issuers to card holders will be known tothose having skill in the art. As a reward, a credit card issuer mayreduce or waive fees for such programs. In another example, some creditcard issuers charge account holders various types of account fees (e.g.,an annual account fee). As a reward, a credit card issuer may reduce orwaive such fees.

Other reward types may include providing and/or extending warranties forgoods purchased using the credit card account. For example, an accountholder could be rewarded with a one-year extension of the warranties ofall goods costing over $200. Of course, any particular warranty termsand target parameters could be set as desired by the credit card issuer.In some embodiments, the target parameter and/or the terms of an awardedwarranty is based on account and/or transaction data associated with theaccount holder. For example, an account holder could be rewarded with aninety day warranty of one or more purchased products for meeting aquarterly charge volume target of $1200.

In some embodiments, the rewards may be applied to a credit cardaccount. In other embodiments, as discussed herein, rewards may bedistributed to the account holder. For example, gifts and discountcoupons may be distributed via a computer network, via email or bypostal mail.

In some alternative embodiments, one or more rewards may be provided tothe account holder or applied to an account before a target parameter ismet (or even determined). For example, in some embodiments, a rewardoffer may inform the card holder that the credit card issuer has reduced(or will soon reduce) the card holder's annual percentage rate. In someother embodiments, in order to maintain the reward and/or avoid apenalty (e.g., in order to maintain a reduced annual percentage rate),the card holder must meet the performance target specified in the rewardoffer within the target period. If the card holder fails to meet theperformance target within the target period, for example, the annualpercentage may be raised or even restored to its prior level. Similarly,cash rebates and other types of rewards could be provided before atarget is met and, if the card holder fails to meet the terms of thereward offer, the credit card issuer could void the rewards and/orrequire that rewards be returned (e.g., gifts or coupons would bereturned or voided, an account balance would be adjusted to indicate thevoiding of a rebate or credit). In some embodiments, the card holder maybe penalized in excess of the value of the reward provided, for failingto meet the target associated with a previously-provided reward. Forexample, an account balance credited with a rebate of $15 may be charged$20 if the account holder fails to meet a performance target within thetarget period.

Evaluations of account data and/or transaction data related to chargevolume, outstanding balance, and number of transactions within a givenperiod are described herein. In some alternative embodiments, criteriamay be established by the credit card issuer for determining whether aparticular transaction indicated by account data and/or transaction datais eligible to be included in one or more measures or evaluations of theaccount and/or transaction data. To be qualified, a transaction may haveto be, for example, greater than a threshold dollar amount, orassociated with a specific merchant or type of merchant. Of course,various other criteria may be used, as deemed appropriate by the creditcard issuer. In one example, in determining an average monthly number oftransactions for an account holder, the credit card issuer may requirethat a transaction be for at least $10 in order to be included in theaverage. Similarly, in some embodiments, when determining targetparameters and/or when transactions are compared to target parameters todetermine whether a card holder is eligible for a reward, only thosetransactions meeting certain criteria (e.g., a threshold purchaseamount, at a particular merchant) may be used in making thedeterminations.

Those familiar with the art to which the invention relates willrecognize various alternative designs and embodiments for practicing thepresent invention. These alternative embodiments are within the scope ofthe present invention. Accordingly, the scope of the present inventionembodies the scope of the claims appended hereto.

1. A method comprising: determining a performance target and a targetperiod for an account; determining a reward associated with theperformance target of the account; offering the reward to an accountholder of the account; providing an indication of the performance targetto the account holder; receiving, by a central controller device,transaction data associated with the account for the target period;comparing, by the central controller device, said transaction data tothe performance target to determine a remaining transaction amountrequired to achieve the performance target; determining a secondperformance target for the account; providing an indication of thesecond performance target to the account holder; and providing anindication of the remaining transaction amount to the account holder. 2.The method of claim 1, in which determining the performance targetcomprises basing the performance target on account data associated withthe account.
 3. The method of claim 2, wherein the account datacomprises at least one of an average principal payment, an averagebalance transfer amount, an average charge volume, and an average numberof transactions in a predetermined period.
 4. The method of claim 1,wherein the performance target comprises an average charge volume, andwherein the remaining transaction amount comprises the differencebetween the performance target and an aggregate charge volume.
 5. Themethod of claim 1, wherein the performance target comprises an averagenumber of transactions during the target period, and wherein theremaining transaction amount comprises the difference between theperformance target and an aggregate number of transactions.
 6. Themethod of claim 1, in which providing an indication of the remainingtransaction amount comprises at least one of updating a databaseaccessible by the account holder, displaying the indication on awebsite, and transmitting an indication to the account holder.
 7. Themethod of claim 1, wherein the indication of the remaining transactionamount comprises an indication that the reward has been earned.
 8. Themethod of claim 1, in which providing an indication of the performancetarget comprises at least one of printing an account statement for theaccount holder, updating a database accessible by the account holder,displaying the indication on a website, or transmitting an electronicsignal to the account holder.
 9. The method of claim 1, in whichoffering the reward comprises at least one of printing an accountstatement for the account holder, updating a database accessible by theaccount holder, displaying the indication on a website, or transmittingan electronic signal to the account holder.
 10. The method of claim 1,in which determining the reward comprises: determining preference datathat is associated with the account; and determining the reward based onthe preference data.
 11. The method of claim 1, in which determining thereward comprises: receiving preference data generated by the accountholder that is associated with the account; and determining the rewardbased on the preference data.
 12. The method of claim 1, in whichdetermining the reward comprises: transmitting a menu to an accountholder that is associated with the financial account, wherein the menuindicates at least one reward offer.
 13. The method of claim 1, in whichreceiving said transaction data during the target period furthercomprises determining that at least one criterion for qualifying atransaction is satisfied.
 14. The method of claim 13, wherein the atleast one criterion comprises a transaction amount that is not less thana predetermined minimum amount.
 15. The method of claim 13, wherein theat least one criterion comprises a transaction that is associated withat least one of a merchant or a merchant type.
 16. The method of claim1, further comprising providing the reward to the account holder. 17.The method of claim 16, wherein the reward comprises at least one of adecrease of a fee associated with a financial account, a decrease of aninterest rate associated with a financial account, or an adjustment of aminimum periodic payment parameter associated with a financial account.18. The method of claim 16, wherein the reward comprises at least one ofa rebate, a discount, or a gift.
 19. The method of claim 16, wherein thereward comprises at least one of an increase of reward program points,and an increase of an amount of frequent flyer miles.
 20. The method ofclaim 16, wherein the reward comprises at least one of a warranty, andan extension of a warranty.
 21. The method of claim 16, wherein thereward comprises at least one of a decrease of a fee that is associatedwith a service, and a reduced insurance premium.
 22. The method of claim16, in which providing the reward comprises providing the reward to theaccount holder before the performance target is achieved and before thetarget period expires.
 23. A computer readable storage device storinginstructions configured to direct a processor to: determining aperformance target and a target period for an account; determining areward associated with the performance target of the account; offeringthe reward to an account holder of the account; providing an indicationof the performance target to the account holder; receiving, by a centralcontroller device, transaction data associated with the account for thetarget period; comparing, by the central controller device, saidtransaction data to the performance target to determine a remainingtransaction amount required to achieve the performance target;determining a second performance target for the account; providing anindication of the second performance target to the account holder; andproviding an indication of the remaining transaction amount to theaccount holder.
 24. An apparatus, comprising: a processor; and a storagedevice operably connected to the processor, wherein the storage devicestores instructions configured to direct the processor to perform:determining a performance target and a target period for an account;determining a reward associated with the performance target of theaccount; offering the reward to an account holder of the account;providing an indication of the performance target to the account holder;receiving transaction data associated with the account for the targetperiod; comparing said transaction data to the performance target todetermine a remaining transaction amount required to achieve theperformance target; determining a second performance target for theaccount; providing an indication of the second performance target to theaccount holder; and providing an indication of the remaining transactionamount to the account holder.